Pro-business Liberal Party proposes ‘departure tax’ for Hongkongers to tackle budget deficit
Hong Kong Free Press
A pro-business political party in Hong Kong has suggested imposing a “departure tax” on residents who travel out of the city to increase government revenue amid a protracted deficit.
Asked by a reporter about the proposal during a routine press briefing, Hong Kong’s leader John Lee said on Tuesday that authorities had encouraged the integration and interchange between the city and the Greater Bay Area without directly responding to the question.
Four lawmakers from the Liberal Party on Monday met with financial chief Paul Chan to discuss their expectations for the budget for the 2024-25 fiscal year.
Among close to 40 policy suggestions put forth by the pro-business party were those designed to mitigate the financial burden of residents and small and medium enterprises, as well as boosting the economy by further developing the “night-time economy” and relaxing travel restrictions on mainland Chinese tourists in the city.
However, the Liberal Party also proposed an “all-round” departure tax on permanent residents as a way to boost government income, following an extended forecast of fiscal deficit by Chan.
“We do not support a departure tax levied on everybody. Instead, we support one that is imposed on Hong Kong’s permanent residents – whether they leave the city by flights, by vessels, or by cars. We support a short-term tax income to compensate for the current deficit,” Tommy Cheung told reporters in Cantonese after meeting with the financial chief.
Chan last month backtracked on an earlier projection that the government would turn a profit in the next fiscal year, saying that the city could expect to see another year in the red in 2024-25.
On Saturday, he said that it could take “one or two more years” extra before the government turned a profit. Government reserves were estimated to fall to HK$720 billion when the 2023-24 fiscal year comes to a close in March.
‘Integration with GBA’
Chief Executive John Lee on Tuesday did not directly respond to the Liberal Party’s proposal when it was raised by a reporter. Lee, during his regular press briefing, said in Cantonese that authorities had been receiving suggestions on how to reduce the fiscal deficit during the budget consultation period, which began last month.
“The government will examine [all proposals] carefully,” he added.
But Lee also said that authorities were working to incorporate the city into China’s national development and “actively participate in the construction of the Greater Bay Area.”
“Hong Kong is itself a city in the Greater Bay Area… and we have seen substantial flow of personnel between [the city and the region]. Generally speaking, we encourage the integration and interchange between the two places,” he said.
The chief executive added that authorities had constantly reviewed public expenditure when making fiscal policies.
Chan will announce the next budget on February 28.
The city has seen a slower-than-expected economic recovery since Covid-related restrictions were lifted last year. Last month, a survey conducted by the Hong Kong General Chamber of Commerce founded that over 60 per cent of enterprises expected no income growth in 2024.
Despite government efforts to boost domestic consumption, many of the city’s residents have been spending abroad. Over the Christmas holiday weekend last month, Hongkongers made 1.32 million outgoing trips, almost triple the amount of visitor arrivals.
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